104. The BBC World Service published its annual review
for 2004-05 in June 2005.[199]
The report, with the picture on its front-cover showing some of
the devastation caused by the Indian Ocean tsunami, provides an
extensive account of the Service's activity and performance during
2004-05. We found the report to be well structured; chapters are
ordered by market sector or activity, with one given over wholly
to the Service's coverage of the tsunami. While annual reports
are, of course, generally retrospective in nature, we found the
inclusion of a chapter on future priorities a very valuable addition.

105. In its report, the World Service sets out its
performance against public service agreements (PSAs) in a clear,
straightforward manner. The Service's performance is measured
by the FCO against five PSA targets: three of these have five
regional sub-targets and one has two sub-targets. Three of the
PSA targets were fully met. Its target for the amount revenue
earned was met over-all but one associated sub-target was missed.[200]
The Service missed its overall weekly audience target and its
shortwave audibility target, which we discuss below.

109. One country where the World Service has had
less success is Russia, where it reached only 0.8 per cent of
the Russian adult population.[204]
While awareness of the World Service had increased there, perceptions
of its objectivity remained static and relevance declined slightly.[205]
Given that the World Service identifies Russia as one of its key
target areas we find its performance there rather disappointing.
Nigel Chapman told us that the Service's performance in Russia
was of concern to him but explained that as well as facing a very
competitive market place there in terms of radio, the Russian
audience was not "demonstrating a great appetite for international
radio services."[206]
He went on to say:

one of the ironies about this you could argue now,
under the way media has been restricted in Russia increasingly
under Putin, is that the case for having the BBC there is greater
that it was five years ago.[207]

We discuss the case for the World Service's move
into local language television markets and video investment below
[paragraphs 152-63 and 178-81].

110. A medium where the World Service has seen remarkable
growth over the last three years is the usage of its online services.
Its PSA target for the international site was worked out using
a 2002 baseline, but while this 2005 target was exceeded by a
wide margin, the BBC accepts that this target was set too low.
However, that said, we believe that the BBC's international news
website receiving 324 millions hits in March 2005 alone is a clear
mark of success.[208]

111. The World Service has continued in the last
year to invest in Frequency Modulation (FM) delivery and reports
to us that by March 2005 programmes were broadcast on FM in 146
capital cities (77 per cent of the world's capitals). This is
a real success. The Service beat its target in 2004-05 for an
FM distribution in 142 capital cities.[209]
Conversely, the Service has failed to meet its target for the
quality of its shortwave audibility. However, it needs to be borne
in mind that long distance transmissions are affected by many
different factors, some of which are environmental and entirely
out of the Service's control. We discuss below the disruptions
late last year to the World Service's Nepali FM service and how
its Nepalese audience could continue to listen to its programmes
on short wave even though its FM service was effectively switched
off by the Government of Nepal.[210]

112. We conclude
that 2004-2005 proved to be another successful year for the BBC
World Service, which saw a significant growth in the size of its
audience. We particularly commend the Service on the success it
had in Iraq where it was the biggest speech radio station.

114. Last year, the Department for Culture, Media
and Sport (DCMS) in its Green Paper, Review of the BBC's Royal
Charter, A strong BBC, Independent of Government, affirmed
that "the World Service should remain a Government-funded
arm of the BBC, providing high quality, impartial international
news to audiences who might otherwise not receive it."[213]
It recommended that the World Service should explore how it could
face up to the global ascendance of satellite television and proposed
that the Service consider reducing its portfolio of languages,
particularly in central and eastern Europe.

115. The Green Paper signposted to the World Service
a need to shift its focus "eastwards and southwards"
in particular to the Middle East, the Far East and parts of Africa.[214]
This was a position that on the one hand backed up the World Service's
ambition for an Arabic television service and, on the other, the
Treasury's implicit call for a reallocation of its resources for
this purpose. Accordingly, in October 2005, the World Service
wrote to inform us that it was to make a major transformation
to the shape of its services over the next five years.[215]
We found the World Service's submission to our inquiry this year
very useful and it was helpful to receive an outline of the World
Service's reprioritisation plans following their endorsement by
the Foreign Secretary and the BBC board of governors.

116. The proposals to 2007-08 consist of efficiency
savings and a reprioritisation of resources representing 20 per
cent of the Service's entire annual budget, equivalent to £30
million. Over a three-year period the Service will aim to reinvest
these resources into new high-priority activities. When Nigel
Chapman gave oral evidence before us we questioned him on his
reinvestment strategy. He stressed what an enormous challenge
lay ahead for the BBC World Service but seemed confident his plans
to 2007 were achievable. On the feasibility of even further changes,
he explained:

For any organisation that is a challenge, that is
a tough call. We can do it, but I cannot keep on doing it. I cannot
keep on doing 20 per cent, 20 per cent, 20 percent. You will end
up then with no services left over, and that would not be appropriate.[216]

117. The headline changes announced were the closure
of radio services in ten languages and a plan to launch an Arabic-language
free-to-air satellite television news service from 2007. Other
key features of the World Service's strategy highlighted in the
announcement were:[217]

A commitment to be the world's
best known, most creative and most respected voice in international
news;

A continued wish to target influencersopinion
formers and decision makersin every market and, in less
developed markets, to target audiences who have a wider need for
basic news and information;

An aspiration to offer "lifeline" services
to audiences in areas of conflict or in failed states;

An aim to utilise further new media to deliver
news reports in vernacular languages;

An aim to invest in the acquisition and management
of distribution partners on FM and other emerging audio platforms;

Over three years to make over £33 million
of investment in marketing the World Service;

An ambition to reach significant new audiences
through vernacular television by 2010, and

By 2010, a joint aim with the wider BBC, to increase
the global reach of its international news services around the
world from over 190 million to over 250 million weekly users.

The World Service also confirmed to us that it would
continue to achieve further efficiency savings of at least 2.5
per cent of it baseline funding each year up to the end of 2006-07.[218]
Last year, the Service hit its efficiency target of £4.4
million.[219]

118. We
conclude that the Government's vision that the BBC World Service
should remain a service publicly funded through grant-in-aid is
wholly right. We commend the BBC World Service for carrying out
such an extensive review and reprioritisation of its resources
ahead of the next spending review. This will enable it, among
other achievements, to realise its proposal for an Arabic television
news channel in 2007.

119. From March 2006, the BBC World Service reduced
its 42 language portfolio to 32 services.[220]
It has stopped broadcasting on radio in Bulgarian, Croatian, Czech,
Greek, Hungarian, Kazakh, Polish, Slovak, Slovene and Thai. These
closures followed the direction given by the Government made in
its Green Paper on the Review of the BBC's royal charter.[221]
The World Service has also reduced investment in Portuguese for
Brazil, with its presence there becoming mainly internet-based.
There has in addition been a continuing tendency to move broadcasts
from short-wave to FM frequencies. However, it is not clear to
what extent this has affected individual vernacular services,
for example whether it has involved a net reduction in broadcasts.
We recommend that the BBC World Service publish full details
of the effects on each vernacular service of changes in the broadcast
frequency or medium of those services in the past twelve months,
together with the anticipated effects of any further changes scheduled
to take place in the coming twelve months.

120. The BBC World Service told us that broadcasts
in English will remain its core "global offer" but,
having assessed its existing services, other priority markets
will be the Arab and wider Islamic world (including Pakistan,
Iran and Indonesia), China, Russia, India and Spanish-speaking
Latin America.[222]
The World Service will also continue to serve less developed markets
in Africa and Asia, such as Nigeria and Bangladesh, as well as
a number of "information poor" markets.[223]

121. Strategic analysis which had been conducted
by the World Service showed that the 10 language services which
it cut no longer fulfilled its key criteria for investment. The
radio services closed attracted fewer than four million weekly
listeners for an annual spend of approximately £12 million.[224]
In evidence before us, Nigel Chapman outlined the criteria he
had used to evaluate the value and importance of the languages
offered. He told us:

We did a very thorough review lasting about 12 months
of all the 42 vernacular language services in the World Service
against three criteria really; first of all, what you could broadly
describe as geo-political importance; secondly the extent to which
there is a free and independent media available already in those
societies and how far that has changed over the last ten years;
and thirdly the level of impact that those services currently
have.[225]

122. Eight of the languages that were cut were in
central and eastern European countries where there had been significant
changes in the political and media environment over the last 15
years, following the end of the 'Cold War'. Despite reductions
in services in central and eastern Europe, the World Service assured
us that it will continue to serve a number of audiences in the
Balkans and Turkey, but said that the strategic importance of
these markets will be reviewed regularly.[226]

123. Referring to these eight radio services closed,
Nigel Chapman told us that the press freedom index for those countries
where closures had occurred showed a "very steady position"
in terms of press freedom and choice."[227]
He went on to comment, "In fact, some of those countries
have a press freedom level which is as good as the United Kingdom
if not better."[228]
On the Thai and Kazakh services the World Service had assessed
these services as being of "lower impact."[229]
There are only about 40,000 listeners to the Kazakh service, this
in part being due to the lack of FM distribution there owing to
restrictions and to the fact that many Kazakh listeners tune into
the Russian service instead. Nevertheless, there was opposition
to its closure. The National Union of Journalists' general secretary
expressed concern saying:

Does Jack Straw really believe that countries like
Kazakhstan where intimidation of political opponents remains common
and there is significant international concern that recent elections
were rigged no longer needs the type of public service broadcasting
offered by the World Service?[230]

124. In respect of the Thai service, we have received
representations opposed to its closure.[231]
The National Human Rights Commission of Thailand wrote that its
closure would "mean that the Thai people will lose one of
the few remaining independent sources of news."[232]
We also note with some concern that in the last three years Thailand
has slipped from 65th place to 107th in
the press freedom index,[233]
just above Kyrgyzstan, Rwanda and Bahrain.[234]
In response to an Adjournment debate in Westminster Hall on the
Thai service, Dr Kim Howells, Minister of State at the Foreign
Office, said that a key factor in the service's closure had been
its small audience. However, the Minister confirmed that Thailand
will continue to receive the World Service's English language
radio service and the BBC's international online services.[235]
Ideally, if there were not significant financial constraints on
the Service's operations, there would be strong reasons for continuing
with the provision of the Kazakh and Thai language services.

125. Nigel Chapman remarked, "if you have a
sum of money to invest in international broadcasting you have
to make difficult choices and you are making a judgment about
it all the time because in a fixed budget that is the reality
of the position that broadcasters have to face up to."[236]

126. We conclude
that the reduction in the BBC World Service's language range,
which mirrored the direction given by Government, was regrettable.
We recommend that the BBC World Service in consultation with the
Foreign Office review regularly its language services for impact
and financial value but do its utmost to preserve and extend its
language services upon which so many depend for its trustworthy
news and information. We conclude that this is particularly important
in those countries where there is no properly functioning parliamentary
democracy, inadequate freedom of the media and significant violation
of human rights, and we recommend that the BBC World Service is
funded accordingly.

128. Nigel Chapman argued that the "death of
the variety of the content" of the World Service had been
much exaggerated.[238]
He said that there would be no "philistinic dumbing"
down by the World Service.[239]
We were told that the Service had reacted to feedback from its
overseas audiences who were largely coming to the Service for
news and information.

129. The schedule was reorganised so that on weekdays
there would be a greater emphasis on news but on weekends there
would continue to be a wide mix of cultural programming.[240]
The aim was to achieve "a wide range of speech-based programming
of news and information which covers arts, culture, sport, business,
religion, science, history." We were assured that the Service
would not evolve into "a rolling news service", or a
"CNN on the radio." Mr Chapman said:

Some of the things we have been putting out
just do not fit within that overall mix of what audiences now
want. That is the reality. It is a very short-sighted director
of the World Service facing that research who ignores it and ploughs
on as if nothing is happening.[241]

In correspondence forwarded to us by Mr David Laws
MP, Mr Michael Fox, a BBC journalist commented:

While BBC management speaks of maintaining the quality,
breadth and depth of news coverage, including documentary programming,
in-depth programmes such as Analysis are being cut in length,
the Outlook programme is being scrapped altogether, and the idea
of regular "slots" of British news is being abandoneddespite
a regulatory requirement on the World Service to reflect the broad
range of British life and opinion. In a rare outbreak of candour,
the department's editor recently acknowledged that more material
was likely to be repeated as a result of these cuts.[242]

130. We
conclude that it is important that the BBC World Service's English
output continues to include a significant proportion of programmes
which promote British culture and Britain's creativity to overseas
audiences as well as the first-rate, impartial news and information
programmes. It is this mixture of programming which is the World
Service's attraction and a characteristic of its success. We recommend
that under no circumstances should the World Service's English
language programming be allowed to evolve into just a news and
information service.

132. After the failure of the World Service's bid
for extra funds in 2004 for such a service, our predecessor Committee
believed that it was a "missed opportunity" and that
other international broadcasters would "take advantage of
British inaction" to the detriment of the BBC World Service
and the United Kingdom.[245]

133. The BBC's first attempt to set up an Arabic
television news service, in 1994, was a commercial operation in
partnership with a company linked to the Saudi royal family. The
service was cancelled two years later, owing to disputes between
the BBC and its partner, Orbit Communications, over editorial
content.[246] Nigel
Chapman did not consider the venture had been a complete failure:

We [the BBC] did not fail in one sense in 1996. We
actually had quite a significant audience arising from the services
in 1994 to 1996. We failed in 1994 to 1996, if you want to call
it failure, because we defended our editorial principles and values.[247]

Following the station's closure, many of the BBC
journalists who lost their jobs went to work for the fledgling
al-Jazeera.[248]

134. The World Service told us that the lesson learnt
from the 1994 venture was that it was not appropriate to fund
an Arabic television service through a commercial partnership,
particularly not for the BBC, and that the such a service was
best funded through public money.[249]
Mr Chapman told us:

if you want the sorts of stories that we feel we
ought to do without fear or favour, if you have commercial partners
you cannot do that because they then threaten you with pulling
the plug on your funds and say that is not what you want us to
cover, and that then undermines the whole basis of your operation.[250]

135. We asked Mr Chapman whether broadcasting through
such a potentially volatile medium as television, in Arabic, in
a region as politically sensitive as the Middle East, he had any
fear of political interference by incumbent British governments.
Mr Chapman pointed out that the Arabic television service, like
the Service's long-established Arabic radio service and all other
services fall under the broadcasting agreement that is in place
with the Foreign Office. He believed that this agreement made
absolutely clear that editorial independence of the BBC World
Service's output was guaranteed.[251]

This service falls fairly and squarely within that
[the broadcasting agreement] and, therefore, it will have to subscribe
to our relationship with the Foreign Office in exactly the same
way as the radio services do now. There is no different set of
relationships here. That is why I have confidence that the Foreign
Office, our funders, will respect that editorial independence,
as they have done in relation to radio for many years, and new
media as well.[252]

136. The new service will compete for viewers against
commercial satellite broadcasters such as al-Jazeera and
al-Arabiya, as well as the US government-funded al-Hurrah.
The increasing influence of al-Jazeera and its rivals in
recent years and the dominance of satellite television in the
Middle East mean that the World Service's Arabic radio service
risks being outflanked.[253]
BBC Arabic currently has approximately 12 million listeners per
week. However, the radio service faces stiff competition from
satellite television channels, especially in countries where FM
broadcasting is not available to the BBC for its news output,
such as Saudi Arabia, Syria, Egypt and the rest of North Africa.

137. The BBC World Service openly identifies the
strong competition it will face in the Middle East from al-Jazeera
and al-Arabiya but believes that there is an opportunity
for it "to occupy a genuine 'high ground' in the market,
away from the pro-US offer of al-Hurra."[254]
Nigel Chapman told us that al-Jazeera is perceived to be
a "regionally-based" Arabic news station concentrating
heavily upon Middle East news affairs. It is not, he argued, a
"genuine international station" and "definitively
does not bring an international perspective" to world news.[255]
We asked whether the BBC was going to be considered by audiences
in the Middle East as propagating a western view. In reply, Nigel
Chapman told us:

If you look at all the audience research particularly
in relation to radio, even in a society like Iraq where you would
expect people to be very concerned about the point of view you
have just expressed, they compartmentalise, if you like, the BBC's
services in radio and television and new media from the World
Service and other people in a different box from British foreign
policy. They see British foreign policy as one thing and the BBC's
activities as another. When we ask them do you trust the BBC,
do you think it is independent, do you think it is independent
of government, they give it very high marks repeatedly throughout
the Arab world for this. Even in a society like Iraq, we get the
highest ratings for independence and for trustworthiness against
any other international competitor, despite the fact that British
forces are involved in action every day in Iraq. I think that
says something about the subtle understanding of Arab audiences [256]

138. In five years' time, the BBC World Service expects
to have at least 25 million viewers per week; this would be double
the number of listeners its Arabic radio service routinely receives.[257]
And, as part of an overall BBC tri-media portfolio (television,
radio and internet), it aspires to be the largest international
Arabic-language television news channel in terms of reach after
Al-Jazeera.[258]
It should be noted that the Arabic radio service went from a 12-hour
service to 24-hours only three years ago.[259]

139. When Frank Gardner, the BBC's security correspondent,
gave evidence before us last autumn he indicated that the World
Service may well be entering the Arabic television news market
too late as the likes of al-Jazeera were already well established.[260]
Mr Gardner told us that it was a "pity" that the BBC
could not have "got this right 10 years ago" when it
first set up an Arabic television service.[261]
He said since then others have "filled the vacuum",
in particular al-Jazeera which had become a "major
force" in broadcasting and international affairs.[262]
On a new BBC Arabic television service he remarked:

[the World Service] has really got its work cut out
for it. It's coming late to the party. It will be interesting
to see if it works"[263]

On the question of whether the World Service was
in fact entering the Arab news market too late, Nigel Chapman
told the Lords Committee [on Review of the BBC Charter] that:

what people are telling us is that there may be more
choice in the Middle East now and Al-Jazeera is an example
of that choicebut there is still a place for a television
service which has the BBC values running through it, its accuracy,
fairness, impartiality, covering a range of views, and there is
a high ground, if you like, to be obtained and gained in this
market. That is a very strong feeling that comes from the audience
research, it is not just that people are likely to use it, they
are likely to use it for those reasons, they see there is that
gap and they want to use it, they want the BBC to do it.[264]

140. Following the announcement that the World Service
was launching an Arabic television service, Nigel Chapman drew
particular attention to the fact that the news in the Arab press
of the BBC's planned arrival was universally welcomed. He commented,
"If [the BBC's arrival] was too little too late, a lot of
people would be writing that, they would be saying it and they
would be criticising us for doing it. We have hardly had any criticism
whatsoever "[265]

141. The World Service has calculated that in 2007
a 12-hour television service will cost £19 million per
annum to produce.[266]
Nigel Chapman told the Lords Committee, "we are talking about
around £6 million extra to move from a 12 to 24 hour service
because once you have got the infrastructure and you have got
quite a lot of content already it is not double the money
you are doing a top-up in effect."[267]
In addition to the £19 million, there will also be an initial
start-up cost of between £5 million to £6 million, which
will be largely capital expenditure. The Service plans to reinvest
the £12 million of savings made from the reductions in its
radio services into the television channel and it intends to make
up the £7 million shortfall from the efficiency savings in
line with its 2004 spending review commitment. In written evidence,
the Service said that it will bid for additional funding in the
2007 spending review to upgrade the 12-hour Arabic television
offer to a full 24 hour service.[268]

142. Nigel Chapman told us that the station will
need to employ up to 150 people to run the 12-hour service, the
majority of whom we understand will be based in London where the
production of programmes will take place.[269]
As FCO Minister Lord Triesman has noted, the BBC World Service
will be able to draw on considerable synergies and resources in
terms of the wider BBC's newsgathering network.[270]
The BBC already has a substantial presence in Cairo but the Service
told us that it will need to expand its presence in Washington
and Moscow and other key places which are really critical to the
international agenda.[271]
Referring to the costs of the new television channel Mr Chapman
told us, " if you draw upon the BBC's resources and
you draw upon all that news reporting that is going on already,
if you put the new investment alongside that, then I think we
can do it."[272]

143. Nevertheless, we questioned the adequacy of
the £19 million budget with the World Service. We were told
by Nigel Chapman that al-Hurra's annual budget was in the
region of $30 million to $35 million, an amount not "unadjacent"
to that which the World Service was proposing.[273]
We also asked whether a 12-hour service would be sufficient to
allow the new station to establish itself in a market which was
already fairly saturated and where some stations had been in operation
for a number of years. Nigel Chapman argued that the World Service's
strength would be its tri-media approach (radio, television and
online services), which would at some point offer a "good
platform" on which to build a 24-hour service.[274]
Al-Jazeera, on the other hand, we were told, did not have
a radio service nor did it have a particularly good web presence.
Mr Chapman remarked:

I take some reassurance from the fact that we asked
people about the 12 hours a day issue and they said, 'Of course
we tend to consume television more in the evening and so if you
are going to be there in the evenings when it is peak viewing
time, and you are going to be there from the afternoon through
the evenings early into the night, that is fine.' We still have
a very strong radio service, which people tend to listen to in
the mornings "[275]

144. On costs, the World Service also pointed out
that its programming for the Arabic television service would be
on a rolling format whereby once a sufficient amount of material
is collected it is repeated throughout a day. The schedule would
not be like that of BBC2 where lots of "bespoke"
programmes are produced.[276]
Nevertheless, as well as news, Mr Chapman foresaw that:

There will be studio discussions, live link-ups with
bureaux in the Middle East, there will be a lot of reporting on
the ground, not just reporting on the ground from the Middle Eastand
this is very, very importantbut reporting on the ground
from the world as a whole. The BBC has a tremendous amount of
material coming into London every day from those places, as I
am sure you are aware, so you have got a good base on which to
build."[277]

145. Mr Ian Richardson, the former editor of the
BBC's first Arabic television service in the 1990s, has expressed
concerns about the World Service's estimation of costs for the
Arabic channel. In evidence to the Lords Committee he said that
he had "great reservations" about the World Service's
plans and thought it would be "seriously under funded."[278]
He went on to say that an Arabic service would be at least a third
more expensive to produce that an English television rolling news
channel owing to translation costs. Mr Richardson was of the view
that if the new service could not be done well, owing to insufficient
funding, then it should not be done at all.[279]

146. The BBC is expecting to make significant savings
in the way BBC News produces its output for the World Service.[280]
This, the Service said, will involve a re-organisation in the
way the news teams are set up and result in a number of job losses
within BBC News. Mr Michael Fox, a BBC journalist, expresses concern
at "scarce resources" being diverted to the Arabic television
service from the World Service News and Current Affairs budget.
Mr Fox indicates the BBC's plans to reduce the News and Current
Affairs department's staff by 10 per cent could "undermine
the quality" of news and programmes produced for the World
Service.[281]

147. The Lords Committee recently concluded that
the World Service's plans to launch an Arabic news channel were
"ambitious and worthwhile" but believed that a limited
12-hour service would lessen its chances of success in the region.
The Lords Committee concluded, "a 12 hour limit on the Arabic
language channel's broadcasting time will mean the BBC competing
for audiences with one hand tied behind its back."[282]
The Committee recommend that the Government immediately provide
the £6 million so that a 24-hour Arabic channel may proceed.
Lord Triesman on the other hand told the Lords Committee that
the Government believed the World Service was right to start with
12-hour programming in order to discover how that worked out in
practice.[283]

148. BBC World, BBC's commercial 24-hour news and
information television channel, is funded by advertising and subscription.[284]
Although the channel is yet to operate at a profit the BBC forecasts
that it will break even around the end of the decade.[285]
Al- Jazeera is funded through a grant from the Emir of
Qatar but it also receives income from advertising and through
syndication of news and film footage to other news agencies.[286]
We believe that there may also be a financial case for the World
Service covering part of the new Arabic station's costs through
generating income from advertising and selling its output to other
channels in the region. Such commercial activity should not,
however, be allowed to compromise the World Service's impartiality
and independence.

149. In evidence to the Lords Committee, Mr Richard
Sambrook, director of the BBC's Global News Division, explained
that satellite television transmission gave broadcasters access
to markets where FM distribution was extremely difficult.[287]
There are many countries in the Middle East which will not allow
the BBC to broadcast on FM, Saudi Arabia being a case in point.
The BBC does not have a single FM transmitter from Morocco to
Egypt. Mr Sambrook said that free-to-air satellite television
would reach many people in these countries as the prevalence of
satellite dishes regionally was very high.[288]

150. Nigel Chapman explained that because television
had become the firm medium of choice for news consumption in the
Middle East, the importance of World Service radio in the region
would diminish in a number of ways. He said,

It will diminish in the pure number of users, so
our reach will go down, and if our reach goes down then our reputation
will tend to follow behind because if we have fewer people to
listen, it will be less salient, less important and people will
give you less credit for it."[289]

151. We believe that the importance of the BBC World
Service's work in the Middle East and in the wider Islamic world
is crucial in the current international situation. As Lord Triesman
put it:

If we are to try, not by propaganda but by honest
coverage, to offset some of the more extreme propositions that
broadcast, every hour of the day, in the Arab-speaking world then
we ought to get on with [launching the Arabic television service].[290]

152. During oral evidence before us Frank Gardner
emphasised the need for the British Government to get more Arabic
speaking representatives on to Islamic television channels in
order to make the case for Western policy.[291]

153. We commend
the BBC World Service for its achievement in funding the new Arabic
television news service from a combination of efficiency savings
and a reprioritisation of resources from the 2004 spending review
provision. We conclude that the new service will be an important
means of balancing the output of other Arabic language services.
We further conclude that the BBC's impartiality and objectivity
will be of paramount importance if it is to succeed. We recommend
that the BBC World Service together with the Foreign Office review
the new channel's funding and performance in the period leading
up to its first anniversary to ensure it is adequately resourced
and to determine whether extra funding should be provided by the
Government to enable the channel to become a 24-hour service.
We also recommend that the BBC World Service explore the potential
for subsidising the costs of the new Arabic television service
through generating income via advertising and syndication.

155. However, we are reassured that Nigel Chapman
told us that as long as he is director of the World Service, radio
will continue to be the main means of reaching out to people.

I think in large parts of Africa, large parts of
Asia, somewhere like Nepal, which we were talking about earlier
on, it would be not a clever and strategic move to start off with
multi-media services in that environment. Even at the end of this
budget process, if you like, taking us to 2007-08, the World Service
will still be spending 75 per cent of its grant-in-aid income
on radio and related distribution; so radio is still going to
be the vast majority of the expenditure.[293]

156. Beyond 2007, the World Service states it would
like to provide a vernacular multimedia service in priority markets
in the wider Islamic world including Pakistan, Iran and Indonesia;
and also in China, Russia, India, and Spanish-speaking Latin America.
One specific language service referred to is a Persian television
service funded through grant in aid.[294]
During oral evidence, Nigel Chapman told us:

In [the World Service's written evidence to the Committee]
there is a mixture of a hard-costed proposal, which is going to
become fact, if you like, as a result of the 30 million investment
plan and then aspirations, gleams in the eye, which need
to be part of the discussions with Government in the 2007 spending
round, and Persian television is in the latter category, not the
former.[295]

He continued:

As a broadcaster, if we believe that it is really
important that people have access to free and independent media
in societies, then, looking at it objectively, the position of
Iran at the moment, you make out a very strong case for Britain
improving what it can offer in that regard. You also then have
to look at the role of radio and new media, and, as I explained
earlier on, one of the difficulties about Iran is that the access
the BBC can get, both in news-gathering terms but also in terms
of transmitting its radio properly to Iran, is extremely difficult.
The notion that I can get an FM transmitter for the BBC Persian
service into Iran is a non-starter at the moment. One of the ways
you would be able to reach into that society would be through
satellite television, because many people in Iran, increasing
numbers, have access to satellite television. It would be one
of the ways of making sure they were able to access the BBC's
material and services. That is the broadcasting logic.[296]

157. It would appear that there is real appetite
among Iranians for the news and information produced by the BBC.
Nigel Chapman told us that Persian online services were "galloping
away" in terms of audience impact.[297]
BBC Persian.com has become the most popular of the BBC's non-English
language news websites.[298]
It is estimated that Iran has seven million internet users and
BBC Persian.com attracts around one third of all users
in the country.[299]
It us frustrating to read reports that access to BBC Persian.com
was recently blocked within Iran at the request of the Iranian
authorities.

158. The Foreign Secretary in a speech highlighted
the need to help Iranians make "informed choices by
helping improve the flow of information into the country".
He continued:

we in the United Kingdom and throughout Europe need
to think about whether there is more we can do to ensure that
reliable and trusted news services are able to broadcast in all
media, in Persian, to Iranians.[300]

159. The emergence of television was also considered
by the Lords Committee on Review of the BBC Charter. The Committee
argued that given the popularity of television in the developed
world, and its increasing popularity in the developing world,
the World Service will struggle to continue influencing world
opinion unless it launches a television service in a range of
languages. We concur with this view.

160. The World Service has had particular difficulty
accessing key markets in India and China. In the last few year's
the Service saw a dramatic drop in overall radio listening in
India in part due to a ban by Indian regulators on local FM stations
carrying news from foreign broadcasters.[301]
This resulted in a drop of over 12 million World Service listeners
between 1995 and 2002. The World Service told us that China is
a critical market but that it saw no likelihood of better access
to the television market there in the timeframe up to 2010. The
Service will continue to lobby the Chinese authorities for better
access.[302]

161. Lord Carter's review recommended that "the
FCO should explore options for developing a television service
arm of the World Service". He believed that consideration
should be given to the potential role of BBC World. BBC World,[303]
BBC's commercial global television outlet, has so far failed to
generate sufficient revenue from advertising to cover its costs
and continues to experience difficulty in competing with its larger
competitors.[304] The
Lords Committee recommended that the BBC should review all its
international activities and that a strategy outlining the future
of its public and commercial television, radio and online services
should be published.[305]

162. As we discussed above [paragraph 134] the World
Service believes that it is inappropriate to fund services such
as its Arabic television service by commercial partnerships as
this arrangement could be potentially threatening to its editorial
independence and impartial reputation. We concur with this view.
Nonetheless, we believe that World Service consider where appropriate
the potential for generating extra income through advertising
and syndication.

163. There remains in many of the priority markets
identified by the World Service in its 2010 strategy a gulf of
mistrust and misinformation among people owing to the lack of
free and responsible press in those countries. We believe that
it is vitally important and mutually beneficial to provide them
with a source of reliable and trustworthy information through
a non-government mechanism. We are convinced that increasingly
in many countries the medium of choice is television and this
should become in some markets the World Service's chosen means
of delivery. Also, by using satellite transmission it is possible
to step over to a large degree the problems encountered in delivery
of radio and online services such as the blocking and censorship
of programmes and the restrictions faced in FM distribution.

164. On 14 March 2006, the Government in its White
Paper, A public service for all: the BBC in the digital age,
said that the World Service should consider developing new "successful
services" in television.[306]
Nevertheless, the Government did not signal any new funding for
the BBC World Service for further television services. It said,
"it will be for the World Service, in discussion with the
FCO, to decide its priorities and how expenditure could be prioritised
to allow for the development of new services in priority countries."[307]
Similarly, when we asked the Foreign Secretary about funding a
new television channel in Farsi he said, "I would be delighted
to fund it but I don't have the chequebook which is held in the
Treasury."[308]

165. We recommend
that in the run up to the next spending round the Foreign Office
argue the case with HM Treasury for an increase in grant-in-aid
funding for the BBC World Service so that it can introduce further
priority vernacular television services in addition to its new
Arabic service without being forced to make excessive cuts in
its radio and media services.

167. The World Service also leased a frequency on
an FM waveband from the state-owned Radio Nepal, which transmitted
its English language programmes.[310]
It operated during the parts of the day when the state radio was
off the air. We understand that all the World Service's English
language programmes continue to be re-broadcast by Radio Nepal.

168. In October 2005, in a parliamentary written
answer, Dr Kim Howells stated,

The UK is deeply concerned about the restrictions
imposed by the Government of Nepal on the media. We believe that
these restrictions, including the new Media Ordinance, infringe
unacceptably upon freedom of expression.

The British Government and the BBC have formally
requested the government of Nepal to allow the BBC to broadcast
unhindered. The British Ambassador in Kathmandu has also raised
our concerns about media censorship directly with the King, in
the context of our wider concerns about the erosion of democratic
processes, institutions and civil liberties.[311]

169. The Nepali service clearly remains very important
to the World Service.Nigel Chapman said, "The
last thing on my mind is to cut [the Nepali service] back, if
anything I want to strengthen [it].[312]
Mr Chapman went on to say, "The Nepali service is
an ever important service for the people of Nepal in a society
which is deprived of free and independent information, it is close
to my heart and I am going to make sure it remains a strong service."[313]

170. The World Service broadcasts its Nepali-language
service in Kathmandu on FM through Radio Sagarmatha. But on 27
November 2005 BBC Nepali broadcasts were suspended. This came
after the trailing of a BBC Nepali Service interview with Nepalese
Maoist party leader Prachanda, despite the government ban on broadcasting
news on local stations. In a note to us, the Service described
how five Radio Sagarmatha staff were also arrested and their equipment
confiscated.[314] The
staff were later released. BBC World Service has expressed concern
at this development.

171. There has also been censorship of the English
output. Radio Nepal engineers were instructed by the Ministry
to play local classical music to block out main news bulletins.
The Service told us that Radio Nepal has been powerless to object
or take on the Palace on this issue.[315]

172. On 7 December 2005, the World Service wrote
again to tell us that the Nepali Service transmissions had resumed
on Radio Sagarmatha FM.[316]
This we understand came about after a petition was filed by the
Nepal Forum of Environmental Journalists, a non-governmental group
that runs Radio Sagarmatha FM. It had challenged the government's
order prohibiting re-broadcast of BBC Nepali over the FM station.
The Supreme Court of Nepal ordered the government to lift its
ban on BBC Nepali pending a final verdict.

173. During the disruption to the BBC Nepali service
through FM distribution all shortwave broadcasts in English and
Nepali remained unaffected. Audience measurement undertaken in
Nepal at the end 2004 (before the ban was introduced) indicated
that the vast majority of listeners to the Nepali Service (719,000
out of 759,000) tune in to shortwave broadcasts, which have not
been affected by the ordinance by the Nepalese government. Furthermore,
the World Service stated that the reduced availability of news
from domestic Nepali radio stations may have increased listeners'
reliance on shortwave broadcasts.[317]

174. We recommend
that the Foreign Office set out in response to this Report the
latest position regarding the disruption of the BBC World Service's
Nepali serviceand
its assessment of the likely impact on the World Service's broadcasts
in both Nepali and in English in Nepal if the government's proposed
new media ordinance comes into effect.

176. The World Service bureau in Tashkent handles
material for the Russian, Kyrgyz and Kazakh services as well as
for the domestic service. In a written note, the Service told
us that it remained committed to covering events in Uzbekistan,
and stated that the BBC English language correspondents would
continue to seek access to the country and to report on events
there as and when they are granted visas.[320]
During oral evidence, Nigel Chapman told us that all his Uzbek
staff had had to leave or resign from their positions for reasons
of personal safety.[321]
He said that the Service had raised the matter with Uzbek ambassador
in London, who had denied there was any problem.[322]

177. Nigel Chapman explained that the World Service
continued to provide radio services in Uzbek to the people of
Uzbekistan through short wave and medium wave distribution, but
that the degree to which the BBC could report events inside that
country was severely restricted. In November, Mr Chapman had no
confidence that the situation was going to get better quickly.[323]

178. We asked the World Service what pressure the
Foreign Office and FCO Ministers were putting on their opposite
numbers in Tashkent to ensure that the matter was righted as quickly
as possible.[324] The
BBC World Service believed that the British Embassy and Ambassador
in Tashkent had been "particularly helpful and supportive
since the start of the troubles."[325]

179. We conclude
that the security and safety of staff must always be a top priority
for the BBC World Service and we believe that it was right for
the BBC World Service to close its bureau in Tashkent owing to
the attacks and intimidation reported by its journalists last
year. We commend the actions taken so far by the Foreign Office
on behalf of the BBC and the World Service and recommend that
the FCO continue to make strong representations to the Government
of Uzbekistan. We further recommend that in its response to this
Report the FCO indicate whether there is any near-term prospect
of the World Service's bureau reopening in Uzbekistan.

181. The World Service currently provides eight online
language services in Arabic, Chinese, Hindi, Persian (Farsi),
Portuguese, Russian, Spanish and Urdu. Last year, approximately
six and half million people a week used its online services.[328]
Monthly page impressions to the BBC's international news site,
including bbcnews.com, increased to 351 million in August
2005 from 284 million a year previously, an increase of 67 million.[329]
Nonetheless, in his statement in the 2004-05 annual report Nigel
Chapman noted that:

International traffic to the BBC's online services
grew to 324 million page impressions in March 2005, up from 279
million a year earlier. Although the annual increase was lower
than expected, the rise in the number of individual users was
higher, growing 29% from 16.6 million to 21.5 million.[330]

182. We were told that some of the BBC's international
internet services have found it more difficult to make an impact,
for example in China, where the Mandarin and English-language
services are routinely blocked by the Chinese authorities.[331]
On the other hand, in Brazil online services now attract larger
audiences than radio. Consequently, the Portuguese service in
Brazil will become internet-only.[332]
Nigel Chapman explained to the Lords Committee on Review of the
BBC Charter that:

Our minimum position about audience is that
we want to reach out to decision-makers and opinion-formers, people
who are actually going to influence the future of that
society, so we are definitely getting to a younger group of these
people by new media investment. Obviously, we have withdrawn some
funds from radio to do it, as in the Brazilian service, and there
is a risk that some older listeners to the BBC's Portuguese service
will no longer be able to access it. There is definitely a down
side to that, but in the end this is the sort of juggling act
that one has to do in making our priorities.[333]

In January 2005, the BBC's Brazilian website registered
14.3 million page impressions, up more than 120 per cent in a
year. The World Service is also pioneering the introduction of
video content in Brazil.[334]

183. We
conclude that if the BBC World Service is to sustain its position
as the best known and most respected international broadcaster
it must take every opportunity to exploit new technology in order
to keep pace with changing consumer preferences. We commend the
BBC World Service's vision for new investment in digital services
and believe that extra investment in new media will be vital in
the future if the Service is to see a growth in audiences.